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§ 9.4 SCIENTIFIC RESEARCH PROPERTY§ 9.4 SCIENTIFIC RESEARCH PROPERTYSpecial federal tax rules govern the deductibility of charitable contributions ofscientific research property. 82 To qualify under these rules, the property that isthe subject of the gift must be:• tangible personal property, and• stock in trade of a corporation or other property of a kind that wouldproperly be included in the inventory of the corporation 83 if on hand atthe close of the tax year, or property held by the corporation primarily forsale to customers in the ordinary course of its trade or business. 84This deduction is available only to corporations. 85 It is not, however, availableto a small business corporation, 86 a personal holding company, 87 or a servicecorporation. 88In addition to the foregoing, for this charitable deduction to be available, allof the following requirements must be satisfied:1. The contribution must be to an eligible institution of higher education 89 oran eligible scientific research organization 902. The property must be constructed by the donor corporation 913. The contribution must be made not later than two years after the date onwhich construction of the property is substantially completed 924. The original use of the property must be by the charitable recipient 9382 IRC § 170(e)(4).83 See the discussion of the term inventory in § 2.13 and in § 9.3.84 IRC § 170(e)(4)(B). This second criterion is the subject of IRC § 1221(1).85 IRC § 170(e)(4)(B).86 These are known as S corporations. IRC § 1371(b).87 IRC § 542.88 IRC § 170(e)(4)(D). Thus, eligible corporate donors are those that are C corporations. Service corporations arethe subject of IRC § 414(m)(3).89 That is, an institution of higher education that normally maintains a regular faculty and curriculum and normallyhas a regularly enrolled body of pupils or students in attendance at the place where its educational activitiesare regularly carried on. IRC § 170(b)(1)(A)(ii). See § 3.4, text accompanied by notes 355−359. Thistype of eligible institution is required by IRC § 170(e)(4)(B)(i), by cross-reference to IRC § 41(e)(6)(A), whichin turn cross-references IRC § 3304(f), which imposes the following additional criteria: the institution (1) admitsas regular students only individuals having a certificate of graduation from a high school or the recognizedequivalent of this type of certificate; (2) is legally authorized within a state to provide a program of educationbeyond high school; (3) provides an educational program for which it awards a bachelor’s degree or higherdegree, or provides a program that is acceptable for full credit toward this type of degree, or offers a programof training to prepare students for gainful employment in a recognized occupation; and (4) is a public or othernonprofit institution.90 That is, to an organization that meets the following criteria: it is (1) not an eligible institution of higher education(see note 89); (2) exempt from federal income taxation under IRC § 501(a) because it is described in IRC§ 501(c)(3) (see § 3.2); (3) organized and operated primarily to conduct scientific research; and (4) not a privatefoundation (see § 3.4). IRC § 170(e)(4)(B)(i), by cross-reference to IRC § 41(e)(6)(B).91 IRC § 170(e)(4)(B)(ii). Property is considered constructed by the donor corporation only if the cost of the partsused in the construction of the property (other than parts manufactured by the corporation or a related person)does not exceed 50 percent of the corporation’s basis in the property. IRC § 170(e)(4)(C).92 IRC § 170(e)(4)(B)(iii).93 IRC § 170(e)(4)(B)(iv). 281